China Discloses Some Budget Details In Bid to Broaden International Trade

For the first time in 20 years, China revealed today the actual size of its national budget plus several other economic statistics once considered to be state secrets.

The extraordinary disclosures in speeches by Finance Minister Zhang Jingfu and Vice Premier Yu Qiuli appeared to be a giant step toward more open financial accounting in China, needed before Peking can help increase trade with the United States and others by joining lending institutions such as the World Bank.

The budget figures given to the National People's Congress, China's parliament, and reported by its official news agency, betrayed an apparently sluggish economy. Zhang said state revenues this year would be $71.3 billion, the same as or slightly less than revenues collected in 1978.

Zhang blamed the stagnant figures on a number of measures that drain China's income but were designed to increase individual workers' incomes and thus stimulate harder work and higher morale. These include a 20 percent increase in state prices paid for grain, more raises for some city workers, reduction of some rural taxes and major schemes to create more jobs. Without such programs, Zhang said, revenue would have jumped to $81.5 billion, nearly a 15 percent increase.

Economists and bankers are expected to begin arguing immediately about how accurate the new Chinese statistics are. But the figures mark a distinct improvement over the ridiculous exaggerations of the Great Leap Forward of the late 1950s and the nearly total statistical blackout since.

China's last detailed budget figures apparently appeared in a 1959 book to commemorate the anniversary of the Communist liberation, "Ten Great Years."

Peking's accounting methods were so disrupted and its officials so embarrassed by the fraudulent totals of the Great Leap that they stopped releasing statistics. Western scholars were forced to desperately experiment with guesses and extrapolations from a few kernels of data that sometimes leaked out.

The speech by Yu, head of the state planning commission, gave the clearest picture to date of how China is organizing a major economic readjustment that has temporarily slowed its trade with the rest of the world.

He said investment in agriculture, now receiving much of the government's attention as its food shortage continues, will increase from 10.7 percent of the total budget in 1978 to 14 percent this year. At the same time, investment in heavy industry is to drop sharply, from 54.7 percent to 46.8 percent, Yu said. There were no figures on defense spending.

Yu said investment in light industry would increase slightly, from 5.4 percent to 5.8 percent. The state would have to give more priority to coal, oil, electric power and building materials industries, he added.

Zhang said the government took in $71.4 billion last year and spent $70.8 billion for a surplus of $600 million. He said the government wanted a balanced $71.1 billion budget this year.

The figures show how poor China really is. A foreign analyst here noted that "this is a purely national budget and does not include provincial and local spending, which makes up a sizeable part of government activity. But still, on a per capital basis, that's not very much money."

China's total national budget appeared far less than the estimated 1979 budget of more than $181 billion for just one American cabinet department: Health, Education and Welfare, whose secretary, Joseph Califano, arrived in Peking today for a visit.

Peking's failure to project any increase in the budget or even a modest surplus also may indicate an effort to cut back spending in order to cure a temporary deficit. One report reaching Hong Kong said Vice Premier Li Xianian revealed China was $6 billion in the red in April.

Yu said industry had slowed considerably its rise of the last two years, since it was no longer pursuing the relatively easy task of recovering from the unusually low production of the last turbulent year of the life of the late chairman Mao Tse-tung.

He said agricultural production would increase by 4 percent this year and industrial production by 8 percent, after reports of a 13.5 percent industrial increase in 1978. He said light industry would rise 8.3 per cent and heavy industry 7 percent.

The report of Yu's speech in the New China News Agency said the state share in capital construction would be $22.9 billion, although such work is being curtailed. He said total retail sales increased 14.6 percent to $111.5 billion. Total imports and exports, said to be $22.6 billion last year, increased to $28 billion this year.